Six Things That Hurt Your Credit

We all know how important a good credit rating is. It enables us access to a higher amount of money with more affordable rates for such things as credit cards; loans for a car, or a mortgage. However, if you are not careful with your available credit you can see your rating plummet and struggle to obtain any finances in the future. It is far easier to protect your credit rating than it is to repair it. Listed in this blog are six scenarios that people often find themselves in that hurts their credit rating, which hopefully you can avoid and look to protect and strengthen your own rating.

1. Being a new borrower.
If you've only just started to be able to obtain credit your credit score will naturally be low. You can see this increase over time by being smart and only applying for credit when you need to and paying off at least the minimum of any credit you have received on time.

2. Making too many applications.
Your credit rating is affected each and every time you make an application. By applying for too many loans or credit cards in a short space of time your credit rating will start to fall and you begin to look desperate for credit, which is not what a lender wants to see when they go to check your rating. By keeping your applications to a minimum and only when absolutely necessary you can keep your credit rating looking impressive and increase your chances of being accepted.

3. Maxing out your credit cards.
Your level of debt also affects your credit rating. If your credit card balance is almost at its limit your rating is hugely affected. Either make an effort to keep your usage of your credit card to things which absolutely can not be paid off immediately. Also make an effort to try and pay off as much of your credit card bills as possible at the end of the month to ensure you never max out your card, which would drastically decrease your rating.

4. Not making at least the minimum repayment on your bills.
You may or not be aware, but making a payment that is under the minimum repayment is still registered as a late payment by the creditors, which impairs upon your credit rating. If you are struggling to manage your minimum repayments let the companies know. You may be able to reach an agreement that reduces the amount you need to pay back each month.

5. Filing for bankruptcy.
Bankruptcy will hugely damage your credit rating and it will stay on your report for up to 10 years. If you are ever in a position where bankruptcy becomes an option to you think seriously before applying. Make efforts to arrange repayments with all of your creditors. There are also various forums and help-lines around which offer manageable situations to dealing with large debts without needing to declare yourself bankrupt.


6. Making late payments
Arguably the biggest reason for a credit rating to be affected is simply paying back late. This is also the simplest way to protect and strengthen your rating. Make sure you aware of what your minimum repayments are and when they are due. This gives you a timetable to manage your finances and also allows you to set aside money for essential repayments.